HANSAPANK

COMMENTARY TO FINANCIAL RESULTS



HANSABANKA'S AUDITED FINANCIAL RESULTS 2000



Hansabank  Group’s Latvian subsidiary, Hansabanka finished  last  year

with a net income of LVL 4.85 million according to audited results. On

December  31,  2000  the  bank’s total assets amounted  to  LVL  360.1

million.

Hansabanka completed the year 2000 on a high note. It was  a  year  of

market  expansion and rapid development for the bank -  its  clientele

increased  by  75% (incl. an 80% increase in private customers)  while

its customer deposits grew by 72.9% to LVL 285.8 million at the end of

December.  Supported by rapid deposit growth, the Bank’s total  assets

increased  by 79.4% to LVL 360.1 million. Bank’s shareholders’  equity

increased by 68.5% during the year to LVL 30.4 million, boosted  by  a

LVL 7.5 million share issue and the net profit of the year.

On  the asset side the loan portfolio increased by 90.6% to LVL  168.5

million  during  the year. At the end of December  the  allowance  for

credit  losses amounted to LVL 4.5 million, forming 2.7% of  the  loan

portfolio.

To  facilitate  further  rapid development,  the  bank  completed  two

strategically important projects last year. In June the acquisition of

Ventspils  UBB was finalised, giving Hansabanka a strong  foothold  in

one  of  the  fastest growing regions in Latvia – the  Ventspils  port

area.  In  November  Hansabanka completed the  implementation  of  the

Group’s   IT  platform  –  an  important  step  in  terms  of  product

development and implementation as well as efficient customer  support.

The   unified  platform  enables  Hansabanka  to  launch  quickly  and

inexpensively a new product developed by another business unit in  the

Group.

During  the  year  Hansabanka significantly expanded its  distribution

channels.  The number of branches increased by 16 to 48 and number  of

ATM’s  rose by 62 to a total of 140. Another pleasant development  was

the  growing  popularity of Internet banking. At the end of  the  year

hanza.net  already had over 20,000 customers in Latvia  (a  growth  of

2,200%), forming approximately 15% of the bank’s retail customers.



Hansabanka’s  2000 audited net profit was LVL 4.85 million,  exceeding

last  year’s  result by 4.6 times. During the year  the  bank’s  total

revenues  amounted  to  LVL  25.50  million  (+52.7%  from  1999)  and

operating expenses (incl. depreciation) to LVL 17.85 million (+34.1%).

Revenue distribution was the following: net interest income 48.9%, net

fees 29.9%, trading income 19.8%, other income and dividends 1.4%. The

largest  cost  items  were personnel expense with  LVL  5.81  million,

administrative expense with LVL 4.24 million and depreciation with LVL

4.00 million.





Mart Tõevere

Head of Investor Relations

+372 6131 569